I cannot get over or around this image; it stops and startles me. What is it? Capital in paradise? The last man imagined (or imaged) as the last rabbit? What in the world?

For you, for now, the peak point of this short but stuffed article on the shadowy business of oil speculation:

It is in every oil supplier's best interest for prices to go up. Oil is a finite commodity. The world will eventually become more efficient and develop alternative energy sources. In the meantime, suppliers want to squeeze out as much profit as possible from their limited resources. Even if they know that the price of oil is too high (to the point of reducing demand) it is not in their interest to correct it. By setting prices in the smaller but more "trusted" futures market, oil producers realize multiplied gains on their physical oil sales.

Prices in the futures market — and, indeed, any real-life market on a standardized good — do not form where actual supply meets actual demand; they form where perceived supply meets perceived demand. Participants in the futures market merely represent the world around them. A veil has been placed over the public's eyes, and they accept this illusion of a fair price.

Unfortunately, the price set by the all-too-small futures market transcends oil to influence the entire American economy. Our oil-dependent economy is shaped by oil's arbitrarily determined price. In many ways, oil has become a pseudo-currency. Similarly, with oil traded internationally in U.S. dollars, the dollar is pegged against oil. While squeezing American industry, high oil prices also devalue the dollar. With the state of our economy reflected in the price of oil, it has become a new standard for valuing America. We are slaves to this black gold standard.

Here are the minimal facts you should know about McCain's shady history with the financial services:

1. As early as 1985 the Federal Home Loan Lending Board (FHLLB) became concerned that shoddy lending practices at private Saving & Loans were putting the governmental insurance funds (like FDIC), and in turn the US taxpayers, at tremendous financial risk.

2. Edwin Gray, the head of the FHLLB, tried to curtail this reckless lending by putting in very modest restrictions.

3. The Lincoln Savings and Loan Association was under investigation in 1986 for being one of most reckless federally insured lenders, blatantly ignoring the new restrictions and hiding the loss of hundreds of millions of federally insured dollars.

Continue reading "McCain’s Corruption Already Cost You Over 200 Billion Dollars, Taxpayer" »

God ain't hearing it.

Tensions with Russia about a deal between Washington and Poland to install a missile defense system in Eastern Europe -- seen as a threat by Moscow -- and the continued presence of Russia in Georgia contributed greatly to the bullish mood.

Light, sweet crude for October delivery jumped $6 to $121.56 a barrel on the New York Mercantile Exchange. It was crude's highest trading level since Aug. 7.

Lawd today!

Finally, Greenspan is speaking my language:

His quarrel is with the approach the Bush administration sold [the government backing of Fannie and Freddie debt] to Congress. "They should have wiped out the shareholders, nationalized the institutions with legislation that they are to be reconstituted -- with necessary taxpayer support to make them financially viable -- as five or 10 individual privately held units, and auctioned off," he says in an interview this week.

Instead, Congress granted Treasury Secretary Henry Paulson temporary authority to use an unlimited amount of taxpayer money to lend to or invest in the companies...

Yes!

What's most impressive about Grace Jones' new video is it offers the viewer no access to enjoyment or thrills. The whole work is unpleasant to watch and hear--a grinding beat, a morphing monster. This is not a spectacle of corporate capital, corporate greed, corporate hunger. A spectacle seduces the thing it exploits and annihilates. With Jones as the corporate beast, there is no seduction, no sugar, no soft suffocation. Grace Jones makes every effort to fully represent the terrifying force of today's global rich.

Go back to 1985 and listen to "Slave to the Rhythm," which with good reason is referenced in "Corporate Cannibal" ("Lost in this cell, in this hell/Slave to the rhythm of the corporate prison"). Produced by Trevor Horn, the older tune has several seductions: the then-new seduction of the go-go beat; the seduction of Grace's appearance (at once elemental and futuristic), and the seduction of her lyrics, which expressed the sublime of world-historical labor.

Axe to wood in ancient times. Man machine
power line.
Fires burn
hearts beat strong.
Sing out loud the chain gang song.
Never stop the action - keep it up
keep it up.

We have in these words the same sublime that gave much of the Communist Manifesto its beauty and poetry.

The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. Subjection of nature's forces to man, machinery, application of chemistry to industry and agriculture, steam navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalization or rivers, whole populations conjured out of the ground -- what earlier century had even a presentiment that such productive forces slumbered in the lap of social labor?

We are amazed and seduced by the spectacle of production itself, the awesome power of social labor.

With "Corporate Cannibal," the moment of Debord is over. We no longer look at capital (or the history of productive forces) from a safe distance ("don't cry, it's only the rhythm") but directly at its dark mouth, as if we were on a white plate, soon to be devoured. Nothing about this situation is pleasing or thrilling. All we want to do is find a way out of this place/plate; but the image of corporate hunger is fluid: it shifts its shape like some sort of digital snake ("...Digital criminal/Corporate cannibal/Eat you like an animal"). Writes Steven Shaviro:

The modulations of “Corporate Cannibal” don’t give us the sense that anything can happen, but rather one that no matter what happens, it will be drawn into the same fatality, the same narrowing funnel, the same black hole

And you can not shake the hand of this snake. You can't even mistrust it, bribe it, distract it with talk about the importance of civility (verses barbarism), of re-investment of the surplus value, or saving for a rainy day. All of those possibilities are long gone. With this form of capital, neoliberal capital, every barrier to its desire, the negation/consumption of all value, has been removed. What's left is for you to await the inevitable on a plate.

Pleased to meet you/Pleased to have you on my plate”

The decency is a cruel joke; it's not needed.

You won't hear me laughing/As I terminate your day/You can't trace my footsteps as I walk the other way.

That's Grace Jone's stark conclusion of capital at this point, after 30 years of neoliberalism. The rich eat the poor with no compunction or preparation. The video is raw.

Note
For those who think we are living in the fairest of times, please read this article (sent to me by Comrade Erica C. Barnett).

A taste:

How much, we asked our group, would it take to put someone in the top 10% of earners? They put the figure at £162,000. In fact, in 2007 it was around £39,825, the point at which the top tax band began. Our group found it hard to believe that nine-tenths of the UK's 32m taxpayers earned less than that. As for the poverty threshold, our lawyers and bankers fixed it at £22,000. But that sum was just under median earnings, which meant they regarded ordinary wages as poverty pay.

"We work harder and aspire the most," one said. The longer we talked, the more they turned to moral reasons for success and failure, moving away from the structural globalisation reasons given above. One banker said: "It's a fact of modern life that there is disparity and 'Is it fair or unfair?' is not a valid question. It's just the way it is, and you have to get on with it. People say it's unfair when they don't do anything to change their circumstances." In other words, they see themselves as makers of their own fortune. Or, as another banker said, "Quite a lot of people have done well who want to achieve, and quite a lot of people haven't done well because they don't want to achieve."

Anthony asks if this:

is bad.

Anthony, it depends on how abstract you want to be.

When you save money at a bank, most of the money gets lent out to someone else. Look at your account balance. Shift the decimal place one to the left. That's about as much of your money your bank actually keeps around.

The whole banking system relies upon the notion that:

1. These loan investments (made with your money) will eventually be repaid.
2. Huge numbers of people won't ask for all their money back at once.

Let's say 1 ends up being false--say because banks invested in a bunch of secured debt that ends up having no verifiable assets securing the debt. All of your money the bank lent out is gone. Poof.

You come by to cash a check. If we're living in the the early 1920's (or the early 2000's) the following occurs:

You: I want my money.

Bank: One moment sir!

Bank turns from you and cries out.
Bank: Calling all suckers! Please place your money here!

Sucker: Here's my money!

Bank takes the money and turns to you.

Bank: Here's your money sir!

You: Thank you!

After the last sucker has been found and fleeced (1929 version):

You: I want my money.

Bank: One moment sir!

Bank turns from you and cries out.
Bank: Calling all suckers! Please place your money here!

No suckers arrive.

Bank turns to you.

Bank: Fuck you, your money is gone.

You: Fuck you! I'm ruined!

After the last sucker, 2008 version:

You: I want my money.

Bank: One moment sir!

Bank turns from you and cries out.
Bank: Calling all suckers! Please place your money here!

No suckers arrive.

Bank turns to the FDIC and asks for a loan. Receives such a loan.

Bank takes the money and turns to you.

Bank: Here's your money sir!

You: Thank you!

Ready for the trippy part? The FDIC, ultimately, is secured by the full faith and credit of the Federal Government. In turn, the credit of the US Government is secured, well, by you and me. The taxpayers.

The incompetent, failing bank--that has both made huge numbers of bad loans and lost the confidence of new investors--can count on one last big sucker to pay us back. Us.

Heller could not write it better.

My primary bank account is at Washington Mutual. Like everyone else who has money saved at Washington Mutual, I should be concerned. I'm not. My account is FDIC insured. Even if the whole bank goes belly up, as IndyMac just did, up to $100,000 of my investment will be returned to me. Since I'm a Stranger writer / graduate student, I do not even vaguely approach the $100,000 limit. Even if WaMu sinks, I'll float. Because, through the FDIC, I'll pay myself back all the money WaMu lost me. With my money, that I pay in taxes.

Well, not exactly. For now, the FDIC is solvent and doesn't need an infusion of cash from the Federal government. And, while investors are increasingly terrified about lending to banks like WaMu, they continue to buy up US government debt. In other words, the investors have decided most banks are too risky, forcing the banks to borrow from the FDIC instead. The FDIC in turn borrows from the federal government, that in turn borrows from the same frightened investors. Brain hurting again?

Welcome to the land of leaky abstractions.

Anthony, you're a computer guy. I have the perfect metaphor for you.

TCP, the protocol underlying the majority of the web, absolutely guarantees that a given message will arrive, complete and in order. TCP does this by using IP. IP guarantees absolutely nothing. So TCP makes the promises and attempts to deliver them with IP. Most of the time, it works splendidly.

If someone trips and pulls the ethernet cable out of the wall, TCP will keep making promises that IP cannot deliver.

The banks tripped, and the global investors are pulling their plugs out. We're promising to honor all debts, by taking the investors' money to guarantee the investors' money. It should turn out great, if we collectively believe it'll turn out great.

(Crossposted.)

Now, I'm no economawhatsit (not going to put my lot in with 'em, either), but this graph seems troubling.

I trust that some commenters here can explain just how bad this is (or not). Where's Golob? He likes graphs.

Somebody call Al Gore, we're going to need a bigger scissor-lift.

Source: Economic Research Division, Federal Reserve Bank of St. Louis

If you live in Seattle, it might be time to ask for a cost of living increase. The city has the highest inflation rate in the country.

Exxon Mobil, the world’s largest publicly traded oil company, reported on Thursday that second-quarter income rose 14 percent, to $11.68 billion, the highest-ever for an American company.

Nothing can save this country. Nothing. The whole of it is dead.

HARARE, Zimbabwe —
Zimbabwe will drop 10 zeros from its hyper-inflated currency - turning 10 billion dollars into one - the country's reserve bank said Wednesday. President Robert Mugabe threatened a state of emergency if businesses profiteer from the country's economic and political unraveling.

Shop shelves are empty and there are chronic shortages of everything including medication, food, fuel, power and water. Eighty percent of the work force is unemployed and many who do have jobs don't earn enough to pay for bus fare.

One third of Zimbabweans have become economic and political refugees. Another third is dependent on foreign food aid. But Mugabe barred non-governmental organizations from handing out food last month, claiming they were supporting the opposition.

Something that came out of McCain's mouth that's not total rubbish:

McCAIN CALLS WALL STREET 'THE VILLAIN' IN SUBPRIME CRISIS Senator McCain put the blame on Wall Street for the home mortgage credit crisis that has roiled financial markets around the world. "Wall Street is the villain in the things that happened in the subprime lending crisis and other areas where investigations and possible prosecution is going on," Mr. McCain said during a taped appearance on ABC's "This Week" program. The Arizona Republican, who has wrapped up his party's presidential nomination, said he supports the housing bill passed by Congress on Saturday to stem foreclosures and aid Fannie Mae and Freddie Mac, the largest American mortgage-finance companies, even though it may cost taxpayers as much as $25 billion. Mr. McCain, 71, said the risk of the mortgage companies' failure is outweighed by the potential cost.

Ford: Plummeting like a rock.

The Ford Motor Company, stunned by abysmal sales of its most profitable vehicles and a sudden shift in consumers’ tastes, said Thursday that it lost $8.7 billion in the quarter, its worst ever, and would overhaul its North American plants to focus on small cars.

The loss, equal to $3.88 a share, was mostly the result of $8 billion in write-downs because of falling demand for and resale values of gas-thirsty pickups and sport utility vehicles in the United States....

Ford said it would cut production for the rest of the year by an additional 105,000 vehicles, for a total reduction of 26 percent compared with the second half of 2007. Then, it plans to overhaul three truck factories in North America so they can build small cars and double production of gas-electric hybrid vehicles next year.

So what's the prognosis for America's most repugnant symbol of domestic excess and military-backed reliance on foreign oil--the Stretch Hummer? They actually kinda serve a function for, you know, prom-pooling.

So utterly shameless:

The House is expected to vote on the bill as early as Wednesday, and it could be sent to Mr. Bush’s desk by the end of the week.

Mr. Bush had voiced objections to a $3.9 billion provision that would give grants for local governments to purchase and refurbish foreclosed properties — a provision that the White House regards as a bailout.

But Mr. Bush set aside those objections on the advice of the Treasury secretary, Henry M. Paulson Jr., who told him that the overall package was necessary to help stabilize the housing and credit markets, according to the White House press secretary, Dana Perino, who announced the switch Wednesday morning. Ms. Perino said the gravity of the crisis, coupled with Congress’ plans to recess later this summer, was the reason for the reversal.

“The president would not have signed this bill if we had a lot of extra time on our hands,” Ms. Perino said. “We don’t.” Mr. Bush believed he could have won a veto fight with the Congress, but that he had concluded a prolonged veto fight would not be good for the housing industry, she said.

The $3.9 billion provision had been a subject of dispute between Mr. Bush and Congressional Democrats for months, and for a time, at least, Democrats seemed ready to concede. Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the banking committee, said that if removing the grants from the bill was needed to get Mr. Bush’s signature, he was prepared to do so.

I have no words for this. None.

Something for her:

Something for him:

Something for the kid:

Something for everyone:

Something for every morning:

Something for America:

After all the buyouts and staff cuts, is there anyone left reporting on science in Seattle?

I'm not asking about a business reporter who covers biotech. Nor someone who reads press releases and RSS feeds of published scientific articles. I'm definitely not asking about wire reports, or reruns of New York Times articles. Is there anyone, at any of the local papers, who actually covers the scientific community in Seattle, who knows the lab managers, the budget officers, the department chairs, the graduate students and fellows? Anyone who is connected enough to know the science that isn't being done, what crucial questions are going unanswered?

I'm not gloating here. I'm horrified. Seattle is a world class scientific city, right up there with Paris, Boston, San Francisco, Tokyo and Baltimore. The University of Washington is consistently one of the largest federal grant recipients--many years second only to Johns Hopkins in total dollars, typically hovering around a billion dollars--largely due to the high quality of work being done. With all we need right now from science, to have no real press coverage, in one of the primary centers of global scientific research, is terrifying.

I don't count. I'm far to conflicted to honestly report on the state of science in Seattle. I can say there are fantastic stories to be had. Anyone out there?

Ever since the start of the mortgage crisis--whose origins and effects can be revisited at this post, or on this podcast--I've been waiting for the great taxpayer-fueled bailout to begin.

The bailout of Bear Stearns was a mere appetizer to the cliff we're falling over now:

Government efforts to support mortgage giants Fannie Mae and Freddie Mac drew a restrained response from investors today, with the stock prices of the two companies rising only modestly after last week's steep collapse, but by midday investors turned to a new target of the credit crisis: banks.

To recap briefly:
1. The investment banks and mortgage markets were effectively deregulated through the 1990's and 2000's...

2. ...allowing the creation of mortgage backed securities...

3. ...that were increasingly backed by shoddier and shoddier mortgages...

4. ...making what was once one of the most stable and socially productive investments both incredibly risky and socially catastrophic, with no way for investors really know if and when the transition happened...

5. ...leaving the investment banks, mortgage companies, regular banks and even the government sponsored enterprises on the precipice of catastrophic failure in a way not seen since the Depression, when these institutions were last similarly deregulated.

Market theory would tell us the government should not intervene--these institutions should be allowed to fail, the unwise investments allowed to collapse and the money to be lost. At the last height of Laissez-faire economic policy, in the 1920's, that was the plan. The institutions were allowed to collapse one-by-one, causing the Great Depression.

That didn't work out so well. In the 1930's, sifting through the rubble of the US economy, the next plan was regulation. If we think of modern financials as being like junk food--made of many ingredients, intrinsically difficult to discern--knowing the providence of the starting materials really matters. Many of the New Deal regulations did just that--demanding that companies report honestly and completely on their health, that mortgages be attached to information about the borrower indicating an ability to pay and so on.

By making information about investments as honest, comprehensive and accessible, through laws and oversight, investors could avoid the most questionable of financial junk food and thus get fat on the rest. If they did pour money into something obviously dubious, it was far easier to allow the market to do its job, and make the investments as valueless as they had appeared to be. You could easily tell it was crap before you put your money in. You lose it, it's your loss.

These were the regulations written out of existence, or circumvented, in the years leading up to the present crisis.

Like with junk food, the companies and people doing the processing make most of the profit--making the producers (the investors) and the consumers (the borrowers) pay dearly for participation in the market--all while whining they cannot afford things like complete and honest information about what they are selling. Loan agents eventually stopped checking income, employment, the value of the property or the credit history of the borrower, because the mortgage companies stopped asking the loan agents to collect this information, because the investment banks buying up these loans stopped asking as well. The investors buying from the banks didn't really care, as the bond agencies gave the blended investments the highest ratings. The rating agencies, increasingly deregulated, didn't bother asking for this information either. Without it, it was impossible to predict how the loans would perform. They guessed. They were wrong.

Even though only a small percentage of the borrowers failed to make their payments, without information to tell bad from the good investors became spooked. If the rating agencies couldn't tell the value, how could an investor? The lenders rapidly pulled out of the market. First to fail were the investment banks, stuck with loans they could no longer sell to investors--even if the loans were good. Bear Stearns, such a bank, quickly grabbed a handout from you and I, the taxpayers. Next, the mortgage companies and their related banks start to wobble. Indymac just collapsed, and again the taxpayers are asked to reach into their wallets and pay off the FDIC guarantees.

Which brings us to the bailout of Fannie Mae and Freddy Mac. These are Government Sponsored Enterprises that were created to perform a basic and seemingly unavoidably safe and profitable task: Buy up high quality mortgage loans from banks and package them as securities that can be sold to investors at a profit. In essence, this is the honest version of what all the crooked private companies were doing--in which each loan is carefully vetted and matched to the borrowers ability to pay and the honest valuation of the property. These companies are of vast importance to the entire housing market, allowing banks to make far more mortgages than would be possible if each loan had to stay at the originating bank and not be resold. In the wake of the crooked mortgage-backed securities, investors have stopped buying the Freddie Mac and Fannie May mortgage-backed securities. With no investor money coming in, they can no longer buy up loans. In steps us again, the taxpayers. We've now committed our tax dollars to buy up mortgages--money we are ultimately borrowing from the Chinese.

These bailouts aren't helping homeowners. The dishonest crooks--the loan agents, the investment banks, the rating agencies--are having their asses saved with our tax dollars. And, this is happening without any serious re-regulation, without a strong requirement for honesty and clarity on the financial industry's part. From any perspective, this is the worst outcome, virtually guaranteeing another huge bailout in a few years. With no concequences, and so many of those well positioned getting filthy rich off the fiasco, why not do it again, and again, and again?

If we force those who demanded deregulation in the financial industry, who took advantage of the deregulation to dupe others, into an honest position, we'd let them all fail, dragging them out of their windows to the hard streets below, to live under overpasses and eat pet food like their parents and grandparents were forced to do during the last time they ran us all off the cliff. We're too cowardly to do it and will likely pay an even harsher collective price thanks to this cowardice. We're too frightened to let them fail, and suffer as well. I'm frightened of what the collapse will bring. Our political leadership, long greased with Wall Street money, won't even demand rules that will truly complicate such thievery in the future. You should be furious.

Where I'm from:

Got that? This faltering economy stuff is all in your head. Please continue to consume and spend as usual.

I actually agree with McCain's assessment of things, and, to a good degree, so would Marx. If the first book of Capital is about anything, it's this: capitalism is less an economic system and more a belief system. The end of capitalism is then the end of a certain spell, a disenchantment. This disenchantment, however, is not like the one that's pictured in the movie The Matrix, a fall from the illusions of happiness to the miseries of reality. Nor is it the absolute elucidation that Marx longed for his whole life long. It's more instead a re-enchantment, another kind of dreaming and believing. We accept that the nature of humans is first of all symbolic, and so the solutions to their problems must first be found in the human system of symbols. The superstructure--not the base--is our foundation.

In this lecture, "Democracy, Economics, and Military," the Mexican philosopher Manuel De Landa suggests that the real source of modern capitalism is not in the 19th century industrialization of England but in the 16th century development of the Dutch army. Military discipline rather than industrial discipline is the root of modern capitalism.

However, in David Harvey's third segment of his course "Reading Marx's Capital," it is suggested that indulgences sold by the Papacy made the Vatican the first capitalist institution in the world. In medieval times, an amount of gold could buy you a place in the mother of all theme parks, Heaven. Capitalism, then, is nothing but the historical labor or struggle of bringing down to Earth a kingdom that was once cloud land.

Conclusion: One is more likely to find the rudiments of capitalism in the idea of heaven and in military maneuvers than in the market or agora.

From Time/CNN:

In a week when oil prices shot to $143 a barrel, the mood at the World Petroleum Congress in Madrid is surprisingly somber. Perhaps the oil company CEOs and OPEC ministers, gathered for the biggest conference in the industry's calendar, are feeling besieged by the relentless drumbeat of public outrage. Perhaps they have been worn down by their ongoing efforts to blame each other for spiraling prices. Or maybe they just think it in poor taste to gloat about their record profits.

Which do you think is the source of the somber mood: feeling besieged? worn down from blaming each other? or out of a sense of decency?

While you think about that, have a look at this old (now dead) lady and her dog:

The story:

The late US real estate tycoon Leona Helmsley reportedly wanted her estimated $8bn fortune spent on dogs.

She left instructions that her estate go towards dog welfare, according to the New York Times, and animal welfare groups are elated.

The newspaper said that while her wishes were not part of her will courts do consider expressions of intent.

Mrs Helmsley, who died last August aged 87, was dubbed the "Queen of Mean" during a trial in 1989 for tax evasion.

One of the most common products of wealth is an iron misanthropy.

Money is, of course, the substance of a wonderful article by Trisha Ready:

We have reached the end of what author Philip Cushman in a 1990 article in American Psychologist called the "post World War II empty self" era. Cushman writes about the change in America from the Victorian era of saving money and restricting impulses (sexual and otherwise) to the consumer self who is "soothed, organized, and made cohesive" by being filled up with food, objects, and celebrities. Cushman blames psychology and advertising as tools of the financial power structure that created the consumer self by preying on humans' abiding feelings of insecurity and doubt. Credit made us more interesting and glamorous and more competitive with one another even if the things we purchased never did deliver the promised redemption of saving us from our limitations.

What's fascinating about her article is it's attempt to locate (or define) the new American thinking, feeling, and being--the American that is no longer saved from its limitations. An American with limits is something new (or renewed) in the world. This new thing might actually be the "flattening" effect of globalization. Not a flattening of access to new technologies and the competition of international companies and markets, but, instead, a flattening of citizenship. No citizenship in the near-future world will save an ordinary person from a life with limits.

According to The Huffington Post, our stimulus checks are going toward porn.

I hope that not all of it is going to the porn industry. Surely some of those checks are going toward creative pursuits.

Starbucks has announced it will be closing 600 stores in the U.S.

On a (somewhat) related note: I find those new McDonald's coffee ads ("Thank God we don't have to pretend to like jazz anymore because McDonald's serves lattés!") incredibly annoying.

(Though they aren't quite as annoying as those Tulalip Casino ads. "Fun fun fun in the number one place for fun!" Really? That's the best you could come up with?)

The exurbs aren't the only inanity in trouble thanks to the jump in energy prices...

As the cost of shipping continues to soar along with fuel prices, homegrown manufacturing jobs are making a comeback after decades of decline. While it once cost $3,000 to ship a container from a city like Shanghai to New York, it now costs $8,000, prompting some businesses to look closer to home for manufacturing needs...

The rise in transportation costs are fueling what some economists are calling "reverse globalization." For instance, DESA, a company that makes heaters to keep football players warm, is moving all its production back to Kentucky after years of having them made in China.

"Cheap labor in China doesn't help you when you gotta pay so much to bring the goods over," says economist Jeff Rubin.

Some local manufacturers have suddenly found themselves in the thick of boom times.

(ABC news)

I also think Seattle Bubble might be wrong about the economics of moving from Marysville.

... to raise $$$ for Chris Gregoire. $200–$3,200 tickets here.

The BBC reports:

Oil prices have risen after emergency talks among the world's top oil powers and leading consuming nations over the weekend ended with no real resolution.

US light, sweet crude for August delivery increased by $1.38 a barrel to settle at $136.74 while London Brent crude was up $0.99 at $136.24 a barrel.

Those thick and too happity country people over there?
It might benefit them greatly to recall (and restore) the role horses had in the pre-automobile world of their humble/honest/hardworking/churchgoing ancestors.

Yes, Zoo was released and promoted by ThinkFilm:

"May you be in heaven a full half hour before the devil knows you're dead." The Irish saying, which inspired the title of ThinkFilm's highest-grossing release "Before the Devil Knows Your Dead" is an apt one for the specialized distributor, which is currently facing the worst financial crisis of its seven-year history. If last year's release of the acclaimed Sidney Lumet drama marked the heavenly highpoint of the company's career, now Lucifer appears to be breathing down its neck.

And:

Producers associated with Robinson Devor's documentary "Zoo," Susan Kaplan's "Three of Hearts: A Postmodern Family" and David Sington's "In the Shadow of the Moon" all refused to comment for this story on the advice of their lawyers.

I ain't saying nothing.

Banks Find New Ways To Ease Pain of Bad Loans:

In January, Astoria Financial Corp. told investors that its pile of nonperforming loans had grown to about $106 million as of the end of last year. Three months later, the thrift holding company said the number was just $68 million.

How did Astoria do it? By changing its internal policy on when mortgages are classified on its books as troubled. The Lake Success, N.Y., company now counts home loans as nonperforming when the borrower misses at least three payments, instead of two.

For your pleasure, a little lecture by the Žižek, "Enjoyment as a Political Category":
It's entertaining from start to finish.

What happens when the U.S. government tries to eradicate coca crops in South America? Farmers grow more of it—a lot more.

The amount of land devoted to production of coca, the leaf used to make cocaine, has grown at a dramatic pace in Colombia despite a huge American-funded counter-drug program of aerial fumigation and aggressive interdiction, a U.N. agency said Wednesday.

In a 132-page report based on satellite imagery and on-the-ground surveys, the United Nations' Office on Drugs and Crime said that Colombian farmers planted 245,000 acres of coca last year, 27 percent more than in 2006. Coca cultivation in the world's three top producers, Colombia, Peru and Bolivia, increased 16 percent, to 448,743 acres, a swath of land slightly smaller than Delaware.

"The increase in coca cultivation in Colombia is a surprise and shock," Antonio Maria Costa, director of the Office on Drugs and Crime, said in a statement. "A surprise because it comes at a time when the Colombian government is trying so hard to eradicate coca; a shock because of the magnitude of cultivation."

The findings follow almost eight years of heavy aerial fumigation of drug crops in Colombia, an American-designed strategy that has cost more than $5 billion.

Costa’s naiveté is just astounding. He’s the world’s drug czar, yet he experiences “surprise and shock” at supply and demand. Perhaps someone needs to tell him that cocaine sells for $100 a gram.

But it’s not just economics. The fumigation itself is actually propagating more coca fields. According to a report released in March, every time the U.S. sprays crops, farmers have to move to other regions, where they plant more. Betcha that if Costa had bothered to read that report, he wouldn't be shocked.

Because it needs to be repeated:

According to some, Iraq has more unexploited reserves of oil than anywhere else in the world. It has 115 billion barrels of proven reserves, but industry estimates say potential oil fields could more than double that.

"Iraq is the one country that has so much proven and potential reserves - that puts it on a par with Saudi Arabia," saysTariq Shafiq, a veteran Iraqi oil engineer who started his career with the Iraq Petroleum Company.

Pumping it out of the ground is technically cheaper than anywhere else in the world, making it even more attractive to foreign oil companies, Mr Shafiq explained to the BBC World Service's Newshour programme.

A letter from a good friend:

There's a very interesting play of paradoxical requirements within the neoliberal order that I saw highlighted today on the Abu Aardvark website. It has to do with garrisoning defective territories for capitalist domination. The military is pursuing all kinds of advanced social and behavioural modification methods for subduing hostile populations and has recruited social scientists and theorists to that end. They have published a much discussed field manual [U.S. Army/Marine Counterinsurgency Field Manual (FM 3-24)] as the outcome. But, to be successful in its implementation at all levels of society, as the manual requires, the military must have immanent command over resources and institutions. A problem arises with the simultaneous privatisation of these same resources and institutions. It can't be both a hegemonic military force and an open field for economic exploitation! Which is more important?

What Wendy Brown (political theorist from UC Berkeley) has to say about all this:

If the manual can be reduced to a single didactic point, it is that successful wars against insurgents involve erudite and careful mobilization of every element of the society in which they are being waged. These wars will be won through a new and total kind of governance, one that emanates from the military but reaches to security and stability for civilian life, formal and informal economies, structures of authority, patron–client relationships, political participation, culture, law, identity, social structure, material needs, ethnic and linguistic subdivisions, and more (pp. 81–99). So the COIN military not only must coordinate closely with other agents of regime change, including in the host nation, but must itself apprehend and manipulate every aspect of a society if it is to bend the society to its cause rather than to the insurgent one.

....

The boundary breakdowns and erasure of settled jurisdictions articulated and advocated throughout the volume, however, are also at the heart of a set of contemporary problems for counterinsurgency that the manual cannot address or solve. What happens when the military is no longer in charge of the wars it wages because the wars themselves are outsourced to private contractors, and when an occupier is no longer in charge of its occupation because the resources and enterprises of the occupied country have been sold off to the highest bidders in the world market? These are the problems signified today by proper nouns like Blackwater, Halliburton, Abu-Ghraib, and J. Paul Bremer. While the new manual clearly represents a serious effort at securing American hegemony through stabilizing and transforming rather than simply sacking the regions targeted as critical to this hegemony, insurgents are often the least of the forces exceeding the military's control. There are more than 180,000 private security employees in Iraq, substantially more than the total number of U.S. troops even after the spring 2007 surge. The deadly Blackwater shooting spree of September 2007 revealed the extent to which these private security forces are not only beyond the pale of American military command but also beyond the pale of law, any law. As nonmilitary personnel, they are not subject to the U.S. Uniform Code of Military Justice and, if fired, could not be court-marshaled in any event. Operating as combatants outside the boundaries of the United States, they are not subject to American constitutional law. International law would be awkwardly and ineffectively summoned in a context in which international justice instruments have been spurned from the outset.

....

So the manual represents something of a tragic irony, in which the American military has grasped the importance of conducting counterinsurgency on all fronts and with a transformed military culture at the very moment that it is neither capable of controlling most of these other fronts nor in charge of outsourced military operations. The deliberate facilitation of capital's superordination in the new Iraq radically undermines the possibility of coordinating and controlling the elements of counterinsurgency identified as critical in the manual. Similarly, even as the manual repeatedly stresses the importance of unity of effort in counterinsurgency struggles (Chapter 2 is wholly concerned with this), such unity is rendered impossible by the ubiquitousness of privatized security forces, privatized resources, privatized infrastructure building and rebuilding, privatized industry, and privatized prisons and water supplies. How is unified and coordinated effort to be expected among agents produced and governed by a neoliberal rationality whose ruling principle is lack of regulation, restriction, or control by anything outside the private enterprise? And what motivation could there be for investors and contractors involved in these operations to organize their efforts around any end other than profitability, an end that might well collide with "successful" counterinsurgency? It is hard to know why the private enterprises lured to Iraq specifically to sustain an occupation would aim to conclude that occupation. It is even harder to know why any of the foreign capital that flooded post-Saddam Iraq would become invested in national sovereignty and substantive democracy there.

My conclusion: What's happening in Iraq is what always happens when capital thinks it's nothing but itself--pulling itself up by the hair like Baron Munchausen. Iraq marks the dreamy (or nightmarish) moment when capital starts to believe its own fiction. When it sees its own ideology as the world, as the rational, as the real. But capital can not function without state force, state power, the state apparatus. It orders weaker economic systems to do so (Economic Structural Adjustments Programs, and so on), to be like it sees (imagines) itself--a consequence of itself. But it is in reality a consequence of cannons "battering down China walls," and state funded operations and adventures of every kind. The separation of state from capital is not in any way realistic. In the way labor power is the substance of an object and use value is the object, the state is the object and capital its substance.

European researchers said on Monday they discovered a batch of three "super-Earths" orbiting a nearby star, and two other solar systems with small planets as well.

If lifeless, if we can reach them (only 42-light years away), what's in store for these super-Earths?

Capital, wage labour, landed property. Their interrelation. Town and country. The three great social classes. Exchange between them. Circulation. Credit system (private). Concentration of bourgeois society in the form of the state. The ‘unproductive’ classes. Taxes. State debt. Public credit. The population. The colonies. Emigration. The international relation of production. International division of labour. International exchange. Export and import. Rate of exchange. The world market and crises.

Cecil Rhodes:

To think of these stars that you see overhead at night, these vast worlds which we can never reach. I would annex the planets if I could; I often think of that. It makes me sad to see them so clear and yet so far.

Happy tenth birthday, European Central Bank! My, how you've grown. Why? Because it's hard to be a little bit pregnant. The EU represents the only true free trade agreement between nations today.

Grab any responsible economist, and they'll admit to you that free trade requires radical changes between countries. Ahem, in short, to get the theoretical benefits of free trade, nations must:

1. Drop any tariffs, quotas or other special taxes on imported goods and services.
2. Drop any market-distorting practices, like selective subsidies, taxes, regulations or other policies that favor domestic or foreign products or services.
3. Provide free access to accurate information about the markets involved.
4. Allow money and other forms of capitol to flow unrestricted between countries, without currency manipulation or restrictions.
5. Labor must also be able to travel freely within the free-trade region.

By this definition--the definition economists use when discussing free trade, and assume is true when predicting the benefits of free trade--neither the WTO nor NAFTA represent anything approaching free trade. The EU and the European Central Bank fulfill all of these requirements, and thus represent the most aggressively radical application of free trade since the ratification of the US Constitution.

Completeness matters. By having a unified regulatory structure, one EU member nation cannot artificially outcompete another by dropping environmental, labor or safety protections. By sharing the same information gathering structures, no EU nation can falsify economic growth, or hide flaws, more than any other. By sharing a currency, governments cannot manipulate exchange rates, and thus entire balances of trade. Most radically, as a EU citizen, if you cannot find work in your home country, you are free to move to another. If you are the best at a give job, and it just happens to be across a national border in the EU, you can still take the job. No visa. No immigration. Just hop on a train and go. It isn't perfect, the differing healthcare systems between European countries cause some grief, but it's pretty damn impressive.

Compare this to NAFTA. Canada, the US and Mexico have radically different regulatory bodies and standards. All three have distinct currencies, subject to manipulation and speculation. The whole republican primary was grief about "illegal" transfer of labor from one part of this free trade zone to another. Likewise, our trade agreements with China all but encourage currency manipulation and advantage-taking of differences in regulation.

When a trade agreement fulfills the five requirements above, you end up selecting for the most efficient, the most effective and the most successful corporations and individuals. You tend to draw people to regions of economic success and away from those of failure. The economies of the participating nations become better and doing what they do, with the same or less input resources. A good.

When you aggressively pursue only some of the five, you end up selecting for those best at manipulating the remaining. Fail to unify regulations? You select for corporations the best at corrupting the local laws and enforcement to their advantage. Fail to unify currencies? You select for those best at manipulating the currency trading to their advantage. Fail to drop migration restrictions on people and you select for the companies that are the most willing to flaunt the immigration laws. The outcome is far from efficient, and the meritorious are unlikely to succeed. The ruthless win.

Many of the trade deals we've agreed to over the past few decades are anything but free trade. They have much more in common with the crafted and manipulated trade deals of the 19th Century European empires, designed to draw wealth to the already wealthy, to hold down the power of labor and environmentalists, to consolidate power and destroy free markets. The jackals who wrote these trade deals to their advantage, and the disadvantage of the vast majority worldwide, have much to fear from real free trade.

In a delightful way, the very existence of the EU as a real free trade agreement provides a dose of reality, a living and breathing example of how our own situation could be better.

Big oil ain't sharing nothing:

NEW YORK (MarketWatch) -- Exxon Mobil fired back Tuesday at a proposed windfall profit tax, after the oil giant was mentioned by name in Democratic presidential hopeful Barack Obama's call to counteract skyrocketing energy costs by hiking levies on producers.

Spokesman Tony Cudmore said in an e-mail to MarketWatch that U.S. energy companies already pay record taxes, adding that the way to keep energy costs down rests with increased supplies, which require additional investment, not higher taxes.
"Proposals to increase taxes on the industry would discourage the sustained investments needed to safeguard U.S. energy security and are not in the interests of American consumers," Exxon Mobil said.

The darkest place in the spokesman's email is found in the expression "energy security." That's the source of the leading evils of our day.

The stimulus check testimonials, in the post below, are so wild! I went out last week, in downtown Seattle, to see how random people were spending their refunds, and it seems like people here are buying, uh, simpler things - things like shoes, food, horses, MAC lipstick, plane tickets, and big bags of weed...

"I used my $600 to bail myself out of prison, along with $6900 more."

Nick, 28, Welder
Ephrata, PA

A random sampling of some charges that'll earn you $7,000 bail: insurance fraud, failure to pay child support, and beating a man to death in 1864.

Here's an arresting fact: The increase in jet fuel costs from a year ago that airlines are currently dealing with totals around $25 billion in additional costs for carriers, which is about five times more than the airline industry has ever earned in a single year (1999 was a record year for the industry, with profits topping out at about $5 billion).

What consumes jet fuel:

Arjun N. Murti remembers the pain of the oil shocks of the 1970s. But he is bracing for something far worse now: He foresees a “super spike” — a price surge that will soon drive crude oil to $200 a barrel....

An analyst at Goldman Sachs, Mr. Murti has become the talk of the oil market by issuing one sensational forecast after another. A few years ago, rivals scoffed when he predicted oil would breach $100 a barrel. Few are laughing now. Oil shattered yet another record on Tuesday, touching $129.60 on the New York Mercantile Exchange. Gas at $4 a gallon is arriving just in time for those long summer drives.

Let me get this straight, an analyst at an investment bank, whose traders are profiting massively over the rise in oil prices, is bleating in the pages of the New York Times that oil is going to continue to rise, forever. This is the bubble that won't pop. Buy now! BUY!

Don't kid yourself. Indeed, there are legitimate pressures on the oil market, reasons why price should be way higher than before, mostly involving unprecedented demand. But, as I've pointed out elsewhere, there are massive untapped reserves of oil-alternatives, like oil sands, oil shale, the probable massive arctic oil fields (revealing themselves thanks to the melting ice cap) and liquefied coal. All come at horrific environmental costs, but at prices in excess of $120 a barrel, it'll happen. Likewise, if prices stay at this level the global economy will grind to an absolute halt, solving the demand problem in a tidy way that throws us all into misery.

A "super spike" eh? In every pump-and-dump scam, the noise first starts quietly. Only as the last round of suckers are to be recruited, does the flame fanner who "rarely grants interviews, citing concerns about privacy" go public to declare the rise will never end.

Wrap the whole thing in an astroturfed pro-green message:

But the grim calculus of Mr. Murti’s prediction, issued in March and reconfirmed two weeks ago, is enough to give anyone pause: in an America of $200 oil, gasoline could cost more than $6 a gallon.

That would be fine with Mr. Murti, who owns not one but two hybrid cars. “I’m actually fairly anti-oil,” says Mr. Murti, who grew up in New Jersey. “One of the biggest challenges our country faces is our addiction to oil.”
...
High prices, he says, “send a message to consumers that you should try your best to buy fuel-efficient cars or otherwise conserve on energy.” Washington should create tax incentives to encourage people to buy hybrid cars and develop more nuclear energy, he said.

He owns two hybrid cars. Well, mercy me! A real environmentalist, unlike someone who lives close enough to work and what he needs to live as to not need a car at all.

Don't get me wrong. The era of $10 a barrel gas is probably never coming back. Honest analysts, foreseeing the end of this latest speculative game, predict $70 a barrel oil when this latest financial-market-produced bubble pops. That sounds about right.

Dotcoms, energy, housing, dotcoms (again), now energy (again)--one trader scheme after another, like we've returned to the 1920's. Any shock, after we allowed these massive financial institutions to write their own rules again?

This afternoon, about 40 people in business attire strode into the lobby of Washington Mutual Center carrying signs that read “Stop Foreclosure Now.” Representing the Association of Community Organizations for Reforms Now (ACORN) and individuals who had fallen behind on mortgage payments to WaMu, they had come to ask the bank—based in Seattle and one of the nation’s leading home mortgage lenders—to change its lending practices.

WaMu had prepared for the invasion, with a fleet of PR staff and Senior Vice President Reza Aghamirzadeh on hand to respond.

What do you mean this isn't an excellent photo? That's Aghamirzadeh on the left and Jones on the right.

John Jones, president of Washington ACORN, addressed the room: “Our quality of life has been compromised greatly by the sub-prime loans… and Washington Mutual taking advantage of people in low-income communities,” he said. Because of practices such as ballooning mortgage payments, sub-prime rates, and agents who failed to disclose monthly payments, many borrowers have lost their homes. “A few years ago WaMu was a five on a scale of five. On sub-prime loans, WaMu is now a three—and going down," Jones said.

Jones demanded that, within two weeks, WaMu agree to a six-month moratorium on foreclosures of owner-occupied homes, convert delinquent loans to fixed-rate loans the owners can afford, and provide better support services for homeowners.

A man in the crowd named Julio, one of the ACORN members affected by WaMu's predatory lending practices, was never told the cost of his monthly payment rates—which, it turned out, he couldn’t afford. (There's a great description of the mortgage lending mess—and why the economy is in the tubes—over here.)

I never got Julio’s last name or the details of his circumstances because WaMu employed a strategic tactic to separate the protesters from the press. Aghamirzadeh offered personal mortgage consultations to those with grievances—upstairs. He would also be happy to answer questions from the press—in a different upstairs room upstairs—but we all had to go right then.

In the room for the press, Aghamirzadeh was full of platitudes, and he made no commitments to change lending practices or bail out borrowers. Would the circus in the lobby change WaMu’s practices by the two-week ultimatum? “The protest today heightened the acuteness of the issue," said Aghamirzadeh. “We will evaluate [Jones’] recommendations, call him, and set up a meeting.”